Loan Support to Help Large Tourism Operators
Larger tourism operators serve as anchors for the sector, drawing air travellers, cruise ships and visitors to Nova Scotia.
That’s why the province will back loans taken by large tourism operators so they can receive better interest rates and more favourable terms at their bank of choice. The program will be administered by the Nova Scotia COVID-19 Response Council at Dalhousie University.
“COVID-19 restrictions have hit the industry hard,” said Geoff MacLellan, Minister of Business. “Our large tourism operators are important to the growth of our sector. By helping the larger operators, small and medium operators also benefit. There are direct or indirect benefits for everyone.”
The Tourism Sector Financing Assistance Program will provide large operators access to lower-cost financing through a loan backstop. The $50 million program will assist the Nova Scotia tourism sector by providing eligible operators access to debt financing, such as lines of credit or term loans issued by a chartered bank or the Business Development Bank of Canada, at more favourable terms.
Eligible tourism businesses include resort, tour, and scenic and sightseeing transportation operators with at least 100 full-time and/or seasonal employees, annual revenue of at least $10 million and who have experienced revenue decline of at least 50 per cent for the period April 1 to July 30, 2020 compared to the same period last year.
This program fills a gap in federal programming for large businesses in Nova Scotia.
This is the second contribution to the Nova Scotia COVID-19 Response Council. The first $50 million announced in March supported businesses that closed as directed by Public Health orders and funded income replacement, impact grants and reopening support for small businesses, breakfast programs for kids, and supports for unemployed individuals who may not have qualified for the Canadian Emergency Response Benefit (CERB).
Quotes:
“This type of loan support could provide our company with much-needed financial stability as we adapt to this industry-wide crisis under very challenging market conditions. As one of eastern Canada's largest tourism experience providers and employers, we're committed to working with our many partners to ensure that locals and visitors continue to be offered creative, memorable ways to explore and enjoy our province.”
– Dennis Campbell, CEO, Ambassatours Gray Line and Murphy’s on the Water
Quick Facts:
- the amount of the debt cannot exceed $15 million per applicant. Government will guarantee up to 95 per cent of the amount borrowed. The interest rate cannot exceed prime lending rate plus 1.5 per cent
- the Tourism Sector Financing Assistance Program does not provide funds directly to the applicants. The program will provide a standby line of credit for the applicant to provide to their financial institution as part of the debt application
Additional Resources:
Further information on program, eligibility and application form: https://novascotia.ca/coronavirus/tourism-sector-financing-assistance-program/